Navigating board dynamics: Configuration analysis of corporate governance’s factors and their impact on bank performance

This research utilizes the fsQCA technique to investigate how a combination of corporate governance conditions or factors collectively influences the performance of banks. Examining key elements such as board size, busy directors, independent directors, CEO duality, and women on the board, the research employs data collected from the annual reports of 30 banks spanning from 2010 to 2020. The necessary condition analysis (NCA) underscores that no individual condition or factor is indispensable for the ultimate outcome. Nevertheless, the sufficiency analysis reveals distinct solutions, each representing a unique set of conditions or factors sufficient to generate the outcome. The study concludes that the relationship between corporate governance characteristics and bank performance is complex and multifaceted, with neither ROA nor ROE reliant on a singular input condition or factor. The theoretical contributions of the findings align with or partially support various theories and propositions within the realm of corporate governance. Notably, the application of fsQCA contributes to enhance the methodological understanding of corporate governance studies in existing literature.


Introduction
The Basel Committee on Banking Supervision (BCBS) emphasizes how important it is for financial institutions to have strong corporate governance system in order to foster investors' confidence [1].Because financial institutions have so much power, it is necessary to put in place a strong corporate governance framework in order to reduce unfavorable events.Good corporate governance is essential for attracting investors as well as improving the effectiveness of oversight and monitoring management [2,3].Research indicates that investors are prepared to pay up to a 25% premium for institutions with effective governance practices [4,5].These practices not only attract increased capital investment but also contribute to the overall economic development of the country.The proper functioning of an economy relies on the financial sector's ability to allocate financial resources and facilitate seamless financial transactions.Thus, to promote economic development, a strong and safe financial system must be in place [5].
Pakistan's financial sector is consisted of bank and non-bank financial intermediaries.Bank intermediaries include commercial banks, Islamic banks, specialty banks, and microfinance banks [6,7].Non-bank intermediaries include companies that provide insurance, non-bank financial institutions, and development finance groups [8].There are 32 banks in the industry, comprising 5 public sector banks, 23 private banks, and 4 foreign banks.The State Bank of Pakistan (SBP) and the Securities and Exchange Commission of Pakistan (SECP), as the top regulatory bodies in this system, are in charge of overseeing and managing the financial industry [9].
Pakistan's domestic economic activity decreased in 2022; this was partly due to the effects of a global economic slowdown, tighter financial regulations, increased local imbalances, and political unrest [10,11].The Pakistani financial sector showed operational and financial resilience in the face of these obstacles.The banking industry had a major role in the 18.3 percent increase in the consolidated asset base of Pakistan's financial sector in CY22.However, due to substantially higher inflation, the financial depth-which was already unusually low among peer countries-fell even lower, to 61.3 percent, as measured by the assets-to-GDP ratio [12].Thus, because of their significant position in the financial sector, banks in Pakistan must pay special attention to corporate governance.The banking systems are becoming riskier due to the quick changes brought about by deregulation, globalization, and technology advancements.Furthermore, unlike other businesses, banks get the majority of the funding they need to operate from their creditors, particularly their depositors.This is related to the idea that a bank's failure impacts not just its own stakeholders but also has the potential to harm other banks' soundness on a systemic level.
Positive impacts on the overall sustainability practices of firms, encompassing environmental, social, and economic aspects, result from managerial ability of CEO and board [12][13][14].The primary objective of corporate governance is to shield stakeholders and shareholders from wrongdoing within the corporate and managerial spheres [15].Ensuring effective corporate governance is essential in the current context in Pakistan to prevent fraud, business scandals, and the potential legal and criminal repercussions [16,17].Within Pakistan's dynamic financial sector, banks play an indispensable role in fostering economic growth and stability [18].As the country navigates through various economic opportunities and challenges, the efficiency and prudence of its banking institutions assume paramount importance in promoting sustainable development.Among the myriad factors impacting a bank's performance, the composition and attributes of its board of directors stand out as pivotal determinants of success [19].In addition, corporate governance provides executive management and boards of directors with the necessary oversight to improve risk management, guaranteeing the upholding of moral principles at all organizations, including financial institutions.
The board of directors plays a central role in upholding the interests of shareholders, depositors, and various stakeholders [20].An effective board brings together a wealth of expertise, offers independent oversight, and demonstrates unwavering commitment to ethical standards, all of which wield substantial influence over the bank's risk profile, capital allocation, and long-term sustainability.The banking landscape in Pakistan has undergone substantial transformation due to legislative alterations, intensified competition, and evolving consumer preferences.In this context, the board of directors' responsibility in steering banks toward robust governance, strategic decision-making, and prudent risk management becomes even more critical.Numerous theories elucidate the connection between the attributes of a board of directors and their influence on institutional performance.
According to agency theory, the board of directors is in charge of managing and supervising banks on behalf of their owners [21,22].It tackles the conflicts of interest that arise between managers and shareholders, highlighting how the mix of the board affects agency costs and enhances performance [23,24].Specifically, the presence of independent board members can aid in lowering agency costs associated with managerial discretion and information asymmetry.
On the one hand, resource dependence theory argues that organizations thrive by relying on external resources, such as capital and knowledge [25].On the other hand, stakeholder theory emphasizes the need for boards to balance the interests of diverse stakeholders, promoting engagement and effective decision-making [26].Yet other, the upper echelon hypothesis [27,28], asserts that the characteristics of the top management team, including the board, shape an organization's strategic direction and performance [28].Board members' personal traits and experiences influence organizational culture and decision-making [29].Adding members with banking sector experience enhances the board's understanding and judgment capabilities.
This research study provides a range of valuable contributions to the current body of literature on corporate governance in various aspects.First, it delves into the influence of distinct board characteristics, including busy directors (BD) and women on the board (WOB), in conjunction with board size (BS), independent directors (ID), and CEO duality (CEOD), on the performance of banks in Pakistan in the context of resource dependence theory.Directors with busy schedules are more likely to keep up with industry innovations and provide resources to support a company's innovation process [30].The interlocks of these directors offer insightful data and suggestions for evaluating possible novel opportunities [31].However, directors' hectic schedules aren't always a good thing because it might make it harder for them to set aside the essential quality time to carefully consider riskier ideas.Consequently, conducting research on the impact of busy directors is particularly crucial within corporate governance in the banking industry of Pakistan.Second, using both the critical Mass Theory and the Tokenism Theory, this study explores the role of women on the board, analyzing whether they are important influences or token members.Third, departing from traditional research approaches, our study employs an innovative research methodology, fsQCA that integrates the collective influence of these board characteristics on bank performance.This methodology is designed to navigate the intricate landscape of agency theory, resource dependence theory, stakeholder theory, and upper echelon theory, providing a comprehensive understanding of their joint effects.
The intricate interplay between the attributes of a bank's board and its performance encompasses a wide array of conditions or factors.To comprehend the multifaceted nature of this relationship, various concepts and frameworks can be applied.The effectiveness of a board ultimately hinges on its capacity to navigate the complex terrain of stakeholder interests while fulfilling its monitoring and control responsibilities within the specific operational context.This study employs a configurational approach, offering fresh perspectives on how the combined influence of these attributes impacts a firm's performance.The insights derived from this research hold significant value for legislators, regulators, and bank executives, aiding in the formulation of more effective governance structures.Furthermore, fsQCA method contributes to the corporate governance knowledge base.This method allows for the examination of diverse combinations of variables leading to specific outcomes, enhancing our understanding of the intricate relationships among these variables.
The rest of this study is divided into the following sections: The construction of the theoretical framework is the main focus of the second section, which digs deeply into a thorough literature review.We go into the specifics of data collecting and the selected research approach in the third segment.The presentation and discussion of the empirical findings are the focus of the fourth section, and the study's conclusion and discussions are summarized in the fifth and final section.

Board size and bank performance
Within the domain of corporate governance for financial institutions, especially in the banking sector, the size of the board emerges as a crucial determinant [32] (John et al., 2016).Various regulations and guidelines from regulators, investors, and stakeholders are specifically tailored to the banking industry, underscoring the pivotal role of board size and composition in establishing effective governance structures and ensuring financial stability [33].However, existing literature presents conflicting findings on the impact of board size on bank performance.Some studies [34][35][36] report a positive relation between board size and bank performance.In contrast, other studies [37] indicate an adverse link between these variables.
The rationale for advocating a larger board lies in the broader range of knowledge and experience it brings to the decision-making process, potentially leading to more informed and effective decisions-an invaluable asset in the dynamic banking industry.For instance, research by Adams and Mehran [38] establishes a connection between larger bank boards, increased profitability, and reduced risk-taking.However, it is essential to note that a larger board may introduce inefficiencies and slower decision-making processes.The insider-controlled corporate governance system may face the obstacle of delayed decision-making among board members [28,39], attributed to the presence of a substantial board size.Chen and Al-Najjar [40] attribute this to increased complexity, requiring more thorough debates, and the challenge of reaching agreements among numerous directors.Ghosh and Ansari [41] find a negative link between larger bank boards and financial success in their study focusing on Indian cooperative banks.
Despite divergent findings, a prevailing consensus in the literature suggests that larger boards are generally associated with superior bank performance.Numerous studies indicate a causal link between board size and financial performance.We propose the first proposition of the study.P 1 : Large size in a bank board is linked with higher financial performance.

Busy directors and bank performance
In academic research and corporate governance conversations, there has been much discussion and interest in the relationship between board composition and bank performance.A particular area that has drawn interest is the effect that busy directors have on banks' performance.Directors serving on three or more boards concurrently, commonly referred to as "busy directors," and this raises concerns about their capacity to carry out their responsibilities and duties in each capacity.They face constraints on their time and attention, potentially impacting their effectiveness on each board [29].
According to agency theory, there could be agency conflicts when the interests of shareholders and directors don't always coincide [22,42].Directors who are very busy can find it difficult to give each board they serve on enough time and attention, which could make it more difficult for them to operate in the best interests of shareholders and show potential adverse effects of busy directors on board effectiveness [43].Several studies, including the work of AlQudah et al. [44], have indicated that banks with busy directors may experience lower market valuations compared to those without such directors.The overcommitment of directors may hinder a board's ability to fulfill its duties effectively, as busy directors may struggle to attend all meetings and participate fully in deliberations Mazzotta et al. [45].Research by Cashman et al. [46] endorse that boards with busier directors tend to have less effective monitoring mechanisms, raising concerns about governance quality.
Similarly, according to the resource dependence theory, organizations are dependent on outside resources, and the availability of these resources affects the performance of the organization [47,48].Directors who are overly busy may find it difficult to give banks the crucial resources and strategic advice they need [49].The limitations imposed by the busy schedules of such directors, despite their potential to bring valuable experience and expertise from their other board roles, can impede their full engagement in board discussions and decision-making processes [50].
A bank board characterized by an excess of busy directors may also suffer from a lack of diversity and independence, both of which are crucial components of effective corporate governance [51].Consequently, it is generally recommended that banks exercise caution in appointing too many busy directors to their boards, in favor of achieving a balance between capable and committed individuals who can dedicate ample time and focus to their governance responsibilities.However, numerous researches indicate that there is a favorable relationship between bank success and directors' busyness.For instance, research studies discovered that by utilizing their range of expertise, busy directors support efficient governance [52,53].This viewpoint refutes the conventional wisdom that says being busy is always bad.
Diverse methodological techniques are used to examine bank performance and busy directors.While some researchers take a qualitative approach and undertake in-depth interviews and case studies to capture the complex dynamics at play, others utilize quantitative methods, analyzing vast datasets to discover statistical relationships.This study uses innovative research methodology fsQCA to discover the relation between busy directors along with other characteristics of board and bank performance.From the above discussion, we propose the next proposition as below: P 2 : Higher level of busy directors on bank boards is associated with lower level of financial performance.

Independent directors and bank performance
There has been a lot of scholarly discussion on the influence that independent directors have on banks' performance.With the goal of providing a thorough examination of the body of research, this study tries to synthesize findings from various theoretical frameworks and methodological techniques.The theoretical foundation for comprehending the connection between independent directors and bank performance is agency theory.Since they are supposed to exercise effective oversight and act as a check on managerial behaviour, independent directors are viewed as essential to reducing agency conflicts [54].Similarly, another viewpoint is provided by stewardship theory, which advocates for independent directors to behave as stewards acting in the bank's and its stakeholders' best interests.According to this hypothesis, independent directors can improve an organization's performance [55,56].
Several studies show that independent directors and bank performance are positively linked.For instance, Lee and Isa [57] discovered that better financial performance in the banking industry is linked to boards with a larger percentage of independent directors.It is due to the fact that independent directors enhance board transparency and accountability [58,59].Tam et al. [60] also reported that the inclusion of independent directors has a favorable effect on the financial performance of banks, attributing this improvement to increased value, reduced conflicts of interest, and enhanced decision-making.
The literature presents mixed evidence regarding the impact of independent directors on bank performance [61].While some studies demonstrate a positive relationship others indicate no correlation or even a negative one [34,62,63].However, it is widely acknowledged that independent directors can enhance accountability, transparency, and effective risk management in the banking sector [64][65][66].Consequently, the presence of independent directors on bank boards may lead to improved financial performance and more effective risk management, but further research is required to draw definitive conclusions.Thus, the next proposition is proposed as below: P 3 : Better financial performance is anticipated in banks with a higher proportion of independent directors.

CEO duality and bank performance
In the field of corporate governance, there has been much discussion over CEO duality-the practice of one person serving as both the chairman of the board and the chief executive officer (CEO).This is a topic of much discussion, with various theories being referenced, including agency theory, stewardship theory, and resource dependence theory.The literature on CEO duality raises the possibility of an agency dilemma in which the dual-hatted CEO puts their personal interests ahead of the interests of the shareholders.Research has investigated how CEO dualism affects bank performance using metrics like return on equity (ROE) and return on assets (ROA).According to research studies, CEO duality may result in a concentration of power and a decrease in accountability, which would be detrimental to the performance of banks [67][68][69].Contrary to the agency theory, stewardship theory contends that executives are naturally driven to operate in the best interests of the company.This viewpoint suggests that CEO duality could improve decision-making effectiveness by lowering tensions between the CEO and the board.Some empirical evidences indicate that CEO duality improve financial performance by fostering more effective leadership in the banking industry, where quick decisions are frequently needed [70][71][72].
However, it's worth noting that some researchers have failed to identify any discernible effect of CEO duality on the performance of Kenyan commercial banks.In conclusion, the literature offers conflicting findings regarding the association between CEO duality and bank performance.Thus, there is a complicated and nuanced relationship between bank performance and CEO dualism.Different theories present differing viewpoints that are indicative of the various circumstances and settings in which CEO duality occurs in the banking industry.Additional empirical study is required as corporate governance continues to develop in order to offer a more nuanced understanding of the interplay between CEO duality and bank performance, taking into account the joint effect of conditions in the context of fuzzy set qualitative comparative analysis (fsQCA).Consequently, we posit the fourth proposition as under: The CEO duality on bank`s board has a association with financial performance.

Women on board and bank performance
In recent years, the issue of gender diversity within corporate boards has garnered increased attention, particularly in its potential impact on corporate performance, notably in the banking sector.Extensive research has explored the relationship between the presence of women on boards and enhanced corporate outcomes [28,29].Notably, in the banking sector, gender diversity on boards has exhibited a positive correlation with overall organizational success [73].Several studies have elucidated the positive influence of having more women on boards on bank performance.For instance, Adams and Ferreira [74] found that banks achieved better financial results when there was a greater representation of women on their boards of directors.Similarly, Ahmed et al. [75] reported that banks with higher levels of gender diversity on their boards demonstrated improved risk management practices and increased profitability.The favorable association can be attributed to the diverse perspectives and skills that women bring to the boardroom, enhancing decision-making processes and the efficiency of risk management.Furthermore, women may place greater emphasis on ethics and social responsibility, a crucial consideration within the banking sector.However, it is important to note that the specific organizational context and board composition may also influence how gender diversity impacts bank performance.
For instance, research by Erhardt et al. [76] indicated that countries with higher levels of gender equality experienced a more pronounced positive effect of gender diversity on bank performance.In summary, the body of research suggests a potential advantage in promoting gender diversity within bank boards, as it has the potential to enhance risk management, decision-making processes, and the prioritization of ethical and social responsibility.Nevertheless, the specific context and composition of boards may influence the extent to which gender diversity affects bank performance.Consequently, organizations should prioritize gender diversity within their boards and strive to cultivate an inclusive and diverse environment.Nevertheless, this study makes a significant contribution by utilizing the fsQCA method to analyze the impact of women on boards in combination with other factors, including CEO duality, board size, independent directors, and busy directors.This approach allows for a more comprehensive understanding of the combined effects of these conditions or variables.P 5 : The presence of women on bank board's leads to better financial performance.
The theoretical framework depicted in Fig 1 provides insight into the liaison between board characteristics and performance within the banking sector.This framework is grounded in the perspectives of agency theory, resource dependence theory, stakeholder theory, and the upper echelon hypothesis.In alignment with agency theory, the board of directors is entrusted with the responsibility of managing and overseeing banks on behalf of their owners.This theory addresses conflicts of interest between managers and shareholders, highlighting how the board's composition influences agency costs and overall performance.Specifically, the incorporation of independent board members is viewed as a means to mitigate agency costs associated with managerial discretion and information asymmetry.
Conversely, resource dependence theory suggests that organizations thrive by relying on external resources such as capital and knowledge.Simultaneously, stakeholder theory emphasizes the crucial role of boards in balancing the interests of diverse stakeholders, promoting engagement, and facilitating effective decision-making.The upper echelon hypothesis posits that the characteristics of the top management team, including the board, significantly shape an organization's strategic direction and performance.Personal traits and experiences of board members exert a substantial influence on organizational culture and decision-making processes.Additionally, augmenting the board with members possessing expertise in the banking sector enhances its understanding and judgment capabilities.

Methodology
In the 19th century, the field of social science emerged with the aim of comprehending and enhancing societal realities and the well-being of individuals within a structured system of corporate governance [77].Social scientists from this era embraced the system approach, originally formulated by Antlej et al. [77], as a foundational framework for innovative research methodologies like fuzzy set qualitative comparative analysis (fsQCA).This unique research methodology enables a systematic exploration of the connection between theories and empirical data by examining a moderate number of cases, typically ranging from 15 to 65 [78].This methodology namely configuration analysis with QCA is particularly well-suited for delving into matters related to corporate governance and its influence on overall performance [79].
The study draws upon data extracted from the annual reports of 30 banks spanning the years 2010 to 2020, aiming to investigate the relationship between corporate governance components and bank performance.Utilizing the fsQCA technique for analysis, this study addresses the disparity between theoretical concepts and empirical findings related to corporate governance factors, thereby enhancing our understanding of the subject.For the analysis, the study calculates the average values for various variables, including the count of independent directors (ID), board size (BS), CEO duality (CEOD), busy directors (BD), women serving on the board (WOB), as well as metrics such as return on assets (ROA) and return on equity (ROE) [80].

Operational definitions
Table 1 provides the operational definitions for the variables employed in the study.
Based on a sample size of 352 observations, Table 2 displays the descriptive statistics for the seven variables that were used in the study.The results demonstrate that the average board size ranges from smaller to larger boards, with a standard deviation of 2.08 and a mean of 9.25.With a mean of 59% and a standard deviation of 12%, the busy director variable indicates that Table 1.Operational definitions.

Input variables Symbol Definition
Board Size BS Total number of directors serving on board [81].
Busy Directors BD Directors classified as busy, which is defined as holding three or more external directorship positions [81,82].
Independent Director ID An independent director is an individual not employed by the company on whose board they serve, and they are not engaged in the day-to-day operations.Their role involves offering impartial advice and overseeing the board's activities [83,84].

Chief Executive Officer Duality
CEOD The variable CEOD (Chief Executive Officer Duality) is assigned a value of 1 when the CEO also holds the position of Chairman, and 0 otherwise [85].
Women on Board WOB The percentage of WOB on a board is calculated by dividing the number of female directors by the total number of directors [86].
Return on Assets ROA Net income divided by total Assets [87] Return on Equity ROE Net income divided by total Equity Capital [88] https://doi.org/10.1371/journal.pone.0300283.t001 the directors are typically fairly busy.With a mean of 38% and a standard deviation of 10%, the independent director's variable shows that there is variance in the degree of independence among directors.The variable CEOD (Chief Executive Officer Duality) is assigned a value of 1 when the CEO also holds the position of Chairman, and 0 otherwise.The average value of this variable is 69%, suggesting that a majority of banks have a CEO who is also the Chairman.The women on board variable's mean value are 1% and its standard deviation is 12%, indicating that there aren't many women on the corporate boards.Last but not least, the return ROA and ROE variables have respective means of 9% and 15% and standard deviations of 16% and 18%, showing that the profitability of the sampled enterprises is moderate to low.By calibrating the data in the fsQCA, fuzzy sets are produced.We made use of three criteria (5%, 50%, 95%), which are frequently applied in direct calibration to determine the size of a set under study's membership for this inquiry [89,90].

Necessity analysis
The first stage of fsQCA, necessary condition analysis (NCA), enables us to identify which particular input condition is necessary component for the result.
For observing necessary condition analysis (NCA), as used by Rekik and Bergeron [91], the Table 3 shows consistency and coverage values for each input as well as its absence.Given that none of the consistency and coverage values simultaneously exceed 0.90, which is typically regarded as the minimum acceptable level for necessary conditions of individual input variables in fsQCA [92,93].Thus, there are no necessary conditions of any individual input for the ROA and ROE.

Sufficiency analysis
Outcome (ROA).During the second stage of analysis, called sufficiency condition analysis (SCA), the primary objective is to identify the specific input conditions required to achieve a particular outcome, in this case, the return on assets (ROA).In the context of fuzzy-set qualitative comparative analysis, a truth table is generated for the sufficient condition analysis, as illustrated in Table 4 as under: This truth table represents various possible configurations that can lead to the desired outcome.Each column in the table corresponds to different attributes or measurements associated with these conditions, while each row represents a unique combination of conditions or factors.In essence, the rows in the truth table signify distinct sets of conditions (either present as 1 or absent as 0) that are being examined.The values for raw consistency, PRI consistency, and SYM consistency seem to be linked to each configuration, likely indicating the degree of effectiveness or results associated with these specific arrangements of circumstances.In Table 4, a PRI consistency score exceeding 0.5 signifies the presence of at least four instances of configurationally consistent data [94].
However, in this examination, eight different solutions (S 1 -S 8 ) have been identified, each representing a distinct combination of conditions that could potentially lead to the desired outcome.These solutions are detailed in Table 5.The overall validity of the solution is confirmed by the fact that the overall consistency level is 0.818, and the coverage stands at 0.768.These values surpass the predefined threshold criteria of 0.8 and 0.2 [92,95]for sufficient condition.Solution 1 has been identified as the pathway that represents the conditions required for achieving the desired outcome, denoted as (~BS*BD*ID*~WOB).This pathway indicates that a specific combination of factors related to busy directors (BD) and independent directors (ID) is sufficient to produce the desired result, while factors like board size (BS) and women on the board (WOB) remains absence.It's important to note that this solution exclusively focuses on the presence or absence of BS, BD, ID, and WOB.In terms of its statistical characteristics, Solution 1 has a raw coverage of 0.419, a unique coverage of 0.032, and a consistency of 0.887.Likewise, Solution 2 introduces a different combination of conditions, namely (BS*~BD*~CEOD*WOB), which highlights that the joint effect of board size (BS) and the presence of women on the board (WOB) is sufficient to produce the desired outcome in the absence of BD and CEOD.This particular solution is characterized by a raw coverage of 0.231, a unique coverage of 0.011, and a consistency score of 0.903.Solution 3 (BD*ID*CEOD*~WOB) appears about similar to Solution 1 with minor difference, featuring a raw coverage of 0.379, a unique coverage of 0.018, and a consistency score of 0.824.Conversely, Solution 4 (~BS*BD*ID*CEOD) shows an amalgamation of peripheral factors associated with busy directors, independent directors, and CEO duality with don't care with rest of the factors, yielding a raw coverage of 0.394, unique coverage of 0.044, and a consistency score of 0.862.Likewise, Solution 5 (BS*ID*~CEOD*WOB) reveals another combination of sufficient conditions that can generate the desired outcome with raw coverage 0.263, unique coverage 0.036 and consistency 0.899.Solution 6 (BS*~BD*ID*WOB) provides similar results to solution 2 with slight difference.The raw coverage 0.353, unique coverage 0.063 and consistency 0.883.Again, solution 7 (~BS*BD*~ID*~CEOD*WOB) includes all input components as core present and absent conditions in its solution with raw coverage 0.202, unique coverage 0.017 and consistency 0.858.However, solution 8 (BS*BD*~ID*CEOD*WOB) includes all input components as core and peripheral conditions with blending of its present and absence.The raw coverage of this solution is 0.245, unique 0.051 and consistency 0.941.
Outcome ROE.Table 6 represents the truth table used for the sufficiency condition analysis (SCA) of ROE with a consistency level of 0.85 and a frequency of 1.When PRI consistency exceeds 0.5, it signifies the existence of a minimum of four consistent configurational combinations [94].Considering the context of achieving the desired outcome of return on equity (ROE), the sufficient condition analysis (SCA) has identified seven distinct sets of conditions outlined in Table 7 that can potentially lead to the same outcome.The validity of these solutions is confirmed by their overall consistency level of 0.878 and a coverage rate of 0.861.Notably, these values surpass the predefined threshold criteria of 0.8 and 0.2 [92,95].These seven solutions identify different paths that lead to the outcome as outlined in Table 7.
Solution 1 (~ID*CEOD*~WOB) suggests that achieving the desired outcome of ROE can be solely attributed to CEO duality, with other factors playing a negligible role.This solution exhibits a robust raw coverage of 0.579, a unique coverage of 0.066, and maintains a  consistency score of 0.830.In a similar fashion, Solution 2 offers an alternative path (BS*BD*CEOD), where board size (BS) and CEO duality (CEOD) are identified as core conditions, while busy directors (BD) have a less significant impact (peripheral).This solution demonstrates a raw coverage of 0.366, a unique coverage of 0.028, and maintains a consistency score of 0.737.On the other hand, Solution 3 shows a different combination of conditions (ID*CEOD*-WOB) where CEO duality (CEOD) and the presence of women on the board (WOB) are deemed central (core), while independent directors (ID) play a peripheral role in achieving the desired outcome.This solution presents a raw coverage of 0.429, a unique coverage of 0.051, and maintains a consistency score of 0.863.Solution 4 presents an alternative pathway (BS*~BD*~CEOD*WOB), which suggests that a combination of four conditions is necessary to achieve the desired outcome.Notably, two conditions (BS and WOB) are identified as essential core factors (presence) contributing to the outcome, while the other two (BD and CEOD) are associated with their absence, with BD serving as a core condition and CEOD as a peripheral one.This solution is characterized by a raw coverage of incorporating both the presence and absence of these conditions as necessary to generate the desired outcome.This solution is distinguished by a raw coverage of 0.189, a unique coverage of 0.031, and consistently maintains a high score of 0.900 for consistency.
Solution 5 (~BS*BD* ID*~CEOD*~WOB) indicates all core conditions with presence of BD and ID and absence of rest of the factors.This solution generates raw coverage 0.189, unique coverage 0.031 and consistency 0.900.Similarly, Solution 6 and Solution 7 both present combinations of four conditions, involving a mix of core and peripheral factors, which collectively lead to the same outcome.In Solution 6, the conditions (~BS*~BD*~ID*CEOD) are deemed sufficient for achieving the outcome, while Solution 7 proposes the conditions (~BS*~BD*CEOD*WOB) as adequate for the desired result.These solutions stand out with respective raw coverages of 0.385 and 0.370, both having unique coverages of 0, and consistently maintaining high validity scores of 0.841 and 0.887, indicating that no unique path available for both.

Conclusions and discussion
The study uses data from 32 banks from 2010 to 2020 to examine the relationship between several aspects relating to factors or conditions of corporate governance system and bank performance.The emphasis is on important factors including return on assets (ROA), return on equity (ROE), busy directors, independent directors, CEO duality, women on the board, and board size.
None of the individual input variables-board size, busy directors, independent directors, CEO duality, and women on board-are required conditions for either return on equity (ROE) or return on assets (ROA), according to Table 2's necessary condition analysis (NCA).The results imply that there is a complicated and multidimensional relationship between corporate governance factors and bank performance.Performance is not found to be dependent on a single component, and results are influenced by various combinations of conditions.The outcomes of Necessary Condition Analysis (NCA) in terms of both ROA and ROE affirm the principles of Systems Theory, emphasizing that the performance of complex systems is typically shaped by a multitude of factors and their interplay, rather than relying solely on an individual component.This alignment underscores the idea that understanding the intricate interactions among various elements is crucial for comprehending and enhancing performance in complex systems.Our findings are consistent with the research conducted by Rosao [96].
The truth tables initiate the sufficiency analysis offer a thorough insight into the corporate governance system.In the context of return on assets (ROA), Truth Table 4 indicate effective its impact by showing PRI consistency score of 0.9.This result emphasizes the collective influence of a busy director (BD) and an independent director (ID), significantly contributing to the improvement of financial performance.Additionally, three other combinations moderately contribute to the explanation, as their PRI consistency scores surpass 0.5.Among these three, one arrangement indicates the absence of independent directors (ID), while the other two involve the absence of board size (BS).It is noteworthy that in all these configurations, the presence of a busy director remains constant, underscoring its significance in driving the outcomes.These results do not support the proposition P 2 .However, it lends support to the resource dependence theory by illustrating how directors with diverse networks and varying external commitments can bring substantial resources, expertise, and connections to the organization.Our findings regarding Return on Assets (ROA) align with the research conducted by Mbanyele [97].Shifting our focus to the realm of ROE, Table 6 presents evidence that four configurations make a moderate contribution to the explanation, as all of them display PRI consistency scores surpassing 0.5.Out of these four configurations, two indicate the absence of a busy director (BD), while three reflect the absence of board size (BS).However, it can be deduced that board size (BS) does not appear to significantly influence financial performance in either of its proxy measurements.
Sufficiency analysis for return on assets (ROA) yields eight distinct solutions (S 1 -S 8 ), each of which represents a distinct combination of circumstances.However, seven different sets of paths (S 1 -S 7 ) are shown to be sufficient for return on equity (ROE) in order to get the desired result.The overall findings suggest a moderate relationship between a larger board size and financial performance.However, the relationship is not straightforward but rather intricate and in line with the research of Hordofa [98].Therefore, we cannot unequivocally endorse the proposition mentioned below.
P1: Large size in a bank board is linked with higher financial performance.
Likewise, our findings align with the propositions that busy directors and independent directors positively contribute in performance in the case of ROA but not ROE.The notion that adherence to specific governance practices, impacted by institutional forces, might affect financial performance is consistent with the study's emphasis on the significance of busy directors and independent directors (P 2 and P 3 ).Therefore, we offer partial support to the propositions as follows: P 2 : Higher level of busy directors on bank boards is associated with lower financial performance.P 3 : Better financial performance is anticipated in banks with a higher proportion of independent directors.
In contrast to the preceding scenario, CEO duality (CEOD) reveals intriguing outcomes.It does not align with the proposition in the context of ROA but exhibits full support in the case of ROE.The study offers insights into the agency theory by examining the effects of CEO duality and the presence of independent directors.The results provide some support for the proposition that there is a relationship between CEO duality and financial performance (P 4 ).This is consistent with the notion that the separation of the CEO and chairman jobs may have a beneficial impact on corporate governance and, as a result, financial performance.Therefore, once more, we provide partial endorsement to the proposition below: P 4 : The CEO duality on bank`s board has a connection with financial performance.These findings provide backing for stewardship theory, asserting that executives are inherently motivated to act in the company's best interests.This perspective implies that having a CEO serve as both the chief executive officer and board chair (CEO duality) might enhance decision-making efficiency by reducing conflicts between the CEO and the board.Some empirical evidence suggests that CEO duality can enhance financial performance by promoting more effective leadership, particularly in industries like banking, where prompt decisionmaking is often essential.Our results in line with many studies [70][71][72].
Nevertheless, the outcomes from both proxies, ROA and ROE, related to financial performance, substantiate the proposition that having women on the board positively influences the performance of banks.This study supports the stewardship theory, which suggests that a diverse board may enhance performance and decision-making [98].However, given the complexity and potential dependence of other factors on the role of women on the board, this support is only limited.The study backs up the claim that having more women on board of banks improves the institution's financial performance (P 5 ).This is in line with the gender diversity theory, which contends that diverse boards-including those with a range of gender identities -can enhance performance of a firm.Therefore, we confidently assert that: P5: The presence of women on bank board's leads to better financial performance.
In order to achieve the desired ROA, busy directors and independent directors seem to be essential, but the participation of women on the board, board size, and CEO duality are important for ROE.These results can help banks improve the performance of their governance frameworks.The combinations of conditions that have been found can serve as a useful framework for practitioners and policymakers to develop corporate governance solutions.Adapting governance frameworks to certain circumstances could improve bank performance as a whole.The application of fuzzy-set qualitative comparative analysis (fsQCA) enhances the complexity of the knowledge of the associations between the variables.The paper advances the field of corporate governance research's methodological understanding.To sum up, the paper offers insightful information about the complex combinations of relations among different conditions and factors of corporate governance system and bank performance.The results of this study have practical consequences for policymakers of banks that aim to improve governance practices and, in turn, overall performance.
When visualizing the outcomes using raw coverage as a criterion, solution 1 emerges as the optimal choice for both ROA (~BS*BD*ID*~WOB) and ROE (~ID*CEOD*~WOB) scenarios in sufficiency analysis.These findings underscore the importance of busy directors, independent directors, and CEO duality in achieving favorable financial performance within the banking sector.In general, the results of the study corroborate the principles of agency theory concerning the corporate governance system and financial performance within the banking industry.These findings will serve as valuable insights for managers and policymakers, guiding them in both management practices and the formulation of future policies.

Limitations and future research
1.The study encompassed 32 banks over a ten-year period.Subsequent research could benefit from a larger sample size and an examination of how economic cycles may influence the correlation between performance and governance.
2. This study did not delve into contextual factors that could impact the relationship between governance and performance, such as market dynamics or regulatory frameworks.Future investigations might consider incorporating external elements for a more comprehensive understanding.
3. Conflicting outcomes arise in the context of Return on Assets (ROA) and Return on Equity (ROE).Subsequent research should investigate the reasons behind these inconsistencies.Additionally, future studies could explore alternative performance variables such as Tobin Q, Market Value, and EPS to provide a more comprehensive analysis.
4. This research initially conducted within a Pakistani context; it has the potential for broader global expansion across various regions.